President Luiz Inácio Lula da Silva's unexpected runoff victory over Senator Flávio Bolsonaro triggered a triple slide in Brazilian stocks, bonds and the currency.

According to Chosunbiz, the Bovespa index plunged as much as nearly 17% intraday before closing down 14%–15%, its worst one-day drop in 36 years since 1990. Sell orders hit right after the open and a circuit breaker halted trading for 30 minutes — the first since the March 2020 pandemic turmoil.

Financial News reports that the Bovespa opened down 17.00% at 169,893 points, at one point falling 17.34% to its lowest level since June.

The violence of the move reflects how certain investors were of the opposite result.

Flávio Bolsonaro, who took a surprise first place in the first round touting spending cuts and deregulation, was widely expected to win, and major Wall Street banks including UBS, Morgan Stanley, JPMorgan and Citigroup rushed out buy recommendations on Brazilian assets.

Chosunbiz reports the Bovespa had soared 38% in dollar terms ahead of the election, the world's second-best gain. When Lula won 51.8% to 48.2%, long positions were liquidated en masse.

Financial News notes that the day after the first round, the Bovespa had surged 7.70% on hopes for fiscal tightening.

Chosunbiz reports that single stocks collapsed across the board: exchange operator B3 crashed 36%, investment bank BTG Pactual fell 33%, state-run Banco do Brasil dropped 28%, and Bradesco slid 23%, while Petrobras lost more than 10%.

The small-cap index, sensitive to rate swings, tumbled 27% in a single day — its biggest drop on record. The shock spread abroad, with New York-listed XP slumping more than 48% and Nu Holdings falling 12%–21%.

A Heritage Capital Partners portfolio manager told Chosunbiz he had seen selling at this scale only in cases like the 9/11 attacks or the pandemic.

Both outlets point to Brazil's weak fiscal position as the core fear: the IMF projects a deficit of roughly 8% of GDP this year, with public debt around 83% of GDP and the benchmark rate at 13.75%.

Chosunbiz says Lula's campaign pledges — Bolsa Família increases, free weekend transit, small-business tax relief — would require at least 50 billion reais in extra spending, and roughly $6 billion in planned rights offerings and IPOs were shelved entirely.

JPMorgan downgraded the real and government bonds to Neutral, per Financial News, and Morgan Stanley warned the dollar-real rate could hit 6.00 without credible cuts. Stabilization now hinges on the next finance minister and a credible fiscal plan.